BERLIN — Germany's ruling coalition risks falling into a deeper crisis after the country's federal audit court warned on Monday evening that its supplementary budget for 2023 is "extremely problematic under constitutional law."

The court's statement comes ahead of a key parliamentary budget committee hearing on Tuesday.

Chancellor Olaf Scholz's government was forced to propose the supplementary budget last month after a bombshell ruling by the country's constitutional court blew a €60 billion hole in its finances.

That court ruling limited the government's ability to draw from special funds outside the regular budget that were created to circumvent the country's constitutional debt brake, which restricts federal deficit spending to 0.35 percent of GDP except in times of emergency.

The court decision means that about €40 billion that was already spent on energy price subsidies in 2023 — and which was financed through a special fund — must now be retroactively integrated into the regular budget.

This has all but forced the government and Finance Minister Christian Lindner to propose a supplementary budget for 2023 and to retroactively invoke an emergency for 2023 that would allow the government to suspend the debt brake.

But the audit court, which supervises state finances and issues non-binding recommendations, is questioning the legality of retroactively invoking an emergency for a budget year that is almost over.

The auditors also found it problematic that the government only integrated two special funds into the 2023 supplementary budget, whereas other special funds — such as for child care or digital infrastructure, with a combined volume of €14.3 billion — remain outside the regular budget.

"In the opinion of the federal audit court, the government's calculation of the borrowing relevant to the debt rule is therefore incomplete," the statement said.

The draft supplementary budget is currently under debate in parliament, meaning it can still be amended ahead of its planned approval later this month.